Growth in McDaniel Fruit’s Mexican program

by Rand Green | October 24, 2013

McDaniel Fruit Co. in Fallbrook, CA, expects to “follow the flow of the industry” regarding the growth of its Mexican avocado program, as demand for Hass avocados in the U.S. market continues to climb, according to Rankin McDaniel Sr., president of the company.

“Our Mexican program is growing as the Mexican avocado reaches more and more markets,” he said Oct. 21.

“We have increased our presence in a couple of new locations down there in terms of our relationship with existing companies in Mexico,” he said. “We see our volume increasing out of Mexico this year by about 20 percent, which is a substantial growth” for the company.

“We expect the market to maintain its structure, price-wise, better than it did last year overall for the entire industry out of Mexico,” McDaniel said. “I don’t think we will see the low lows in pricing that we saw last year.” Rather, he expects to see “more moderate pricing through the season.

McDaniel Fruit finished packing its 2013 California avocado crop Oct. 12, “and we are now fully involved in Mexican and Chilean imports,” with Mexican fruit accounting for about 80 percent of the total.” That could change as the season progresses, with Mexico dropping to perhaps a 70 percent market share some weeks, “depending on how Chile moves through their crop” this winter.

The company has increased its bagging programs out of Mexico, McDaniel said. “As our bagging program continues to grow with our customers, they are finding more and more opportunities to sell avocados in multiples in bags,” so McDaniel Fruit has made some investments in bagging equipment “with certain key partners of ours in Mexico. We see that as a growing segment.”

Growth in demand for avocados in the United States “continues to be very robust,” he said. “We are very happy with the situation in the avocado market as it is laying out, and as we project it to lay out for the next six months.”

McDaniel crosses its avocados from Mexico into the United States at both McAllen and Laredo, TX. “We have cold storage and forwarding facilities” in both locations, McDaniel said. “From those shipping points, we distribute out to our U.S. customer base.”

The cold storage facilities in McAllen and Laredo “act as consolidation areas for everything that we are crossing from Mexico, and then we redistribute out to our McDaniel forwarding facilities that are located around the country, including here in Fallbrook, where we send the product for redistribution to the Western states.” The company has other ripening facilities and forwarding facilities “that are located strategically” around the United States, he said.

Looking ahead to the 2014 California crop, he said, “from my perspective, looking at the orchards of McDaniel and McDaniel’s growers, it would appear that the crop is going to be somewhat lighter than it was the past season,” which was “a very nice sized crop.” The smaller California crop, combined with “a little more fruit with the later set in Mexico, should allow Mexico to be stronger in the market for a longer period of time” in spring 2014 than was the case in spring 2013. However, Peru, which is expecting to double its 2014 exports to the United States, versus 2013, will also “have some influence on decisions that are made about how long and how late Mexico wants to push a volume of fruit” into the U.S. market in the spring.

But regardless of whatever decisions are made with regard to volume, Mexico will be in the market right on through the whole season,” he said.